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[Sho_Nuff82]

The problem with the rather nice list of (smartly) bought studios, 2nd parties, publishing deals, moneyhats, and cross-over specials is that...well, they ain't WORKING. Check the Bayonetta 2 threads; it's the opposite reaction, people are vehement against it in a sea of some the dumbest Diretiding ever wrought. The sales of the excellent 3D World are even more damning evidence that people buying Nintendo consoles is like a root canal for most. The question that the THIRD PARTY NAO crowd doesn't comprehend is the "why", and how is that to fix this woe? If it doesn't sell systems as exclusives, how is it to lift the company out of rapidly-becoming chronic financial shakes instead of replacing one dissapointment after another? They seen what happened to most Japanese publishers and the tone-deaf chasing of FOTM fads, right? Right?

It's why IMO a mobile-focused idea is also iffy, it's shareholder soothing rather than "this will work for us cuz this and that".

The hardware is the problem, not the games. Nintendo has two options going forward -design more appealing hardware, or design your games for someone else's appealing hardware.

 

[Toad.T]

It's just a gut feeling I have, but I feel that if Iwata does get sacked his successor will focus more so on the western market. Out of the dwindling numbers for Japan home consoles/portables (In comparison to ios/android platforms) Nintendo's seized a sizable chunk. There was a thread recently showing that a good chunk of 2013 titles that charted well were on Ninty platforms. It's the western market that needs catering to.

Why is that? Because it's grown farther than Nintendo has ever could have seen. What was a massive monster hit then (SMB3, OOT) wouldn't even dent a AAA Blockbuster release now. Plus there's changing tastes, the "Maturing" of the industry, the repulsion to the old and familiar, (See every single Nintendo thread on GAF ever and how a good chunk of the topic gets devoted to: "Nintendo doesn't make new IP's." "Yes they do!" "No They Don't, they still only make Super Zelda and Legend Of Mario!" "Yuhuh" "Nuhuh" "Yuhuh" "Nuhuh") and many other factors.

Whether this is a boom for us gamers (Star Fox! X! F-Zero! New Miyahon IP! Earthbound!) or a bust ("What the fuck's a Zelda? We only make HappyBob in Fantasmaland games now. Are you thinking of AmazonLad and the Harpies of Malcontent?") remains to be seen, but again, my gut tells me that we could have focus shifted towards us in the future.

 

[Nightstick11]

They should also use their sacks of billions to initiate some hostile take-overs asides from opening up a shitload lf western studios and an internet infrastructure.

 

[Vibranium]

It's just a gut feeling I have, but I feel that if Iwata does get sacked his successor will focus more so on the western market. Out of the dwindling numbers for Japan home consoles/portables (In comparison to ios/android platforms) Nintendo's seized a sizable chunk. There was a thread recently showing that a good chunk of 2013 titles that charted well were on Ninty platforms. It's the western market that needs catering to.

Why is that? Because it's grown farther than Nintendo has ever could have seen. What was a massive monster hit then (SMB3, OOT) wouldn't even dent a AAA Blockbuster release now. Plus there's changing tastes, the "Maturing" of the industry, the repulsion to the old and familiar, (See every single Nintendo thread on GAF ever and how a good chunk of the topic gets devoted to: "Nintendo doesn't make new IP's." "Yes they do!" "No They Don't!" "Yuhuh" "Nuhuh" "Yuhuh" "Nuhuh") and many other factors.

Whether this is a boom for us gamers (Star Fox! X! F-Zero! New Miyahon IP! Earthbound!) or a bust ("What the fuck's a Zelda? We only make HappyBob in Fantasmaland games now. Are you thinking of AmazonLad and the Harpies of Malcontent?") remains to be seen, but again, my gut tells me that we could have focus shifted towards us in the future.

Nintendo with a more Western focus could potentially be great, if they bought Next Level Games they could use them and Retro to spearhead an aggressive campaign into NA. Being a Goldeneye 007 fan, Reggie might be able to get an appealing (not gritty and realistic) FPS brought to the Wii U or its successor.

 

[Snakeyes]

It's just a gut feeling I have, but I feel that if Iwata does get sacked his successor will focus more so on the western market. Out of the dwindling numbers for Japan home consoles/portables (In comparison to ios/android platforms) Nintendo's seized a sizable chunk. There was a thread recently showing that a good chunk of 2013 titles that charted well were on Ninty platforms. It's the western market that needs catering to.

Why is that? Because it's grown farther than Nintendo has ever could have seen. What was a massive monster hit then (SMB3, OOT) wouldn't even dent a AAA Blockbuster release now. Plus there's changing tastes, the "Maturing" of the industry, the repulsion to the old and familiar, (See every single Nintendo thread on GAF ever and how a good chunk of the topic gets devoted to: "Nintendo doesn't make new IP's." "Yes they do!" "No They Don't, they still only make Super Zelda and Legend Of Mario!" "Yuhuh" "Nuhuh" "Yuhuh" "Nuhuh") and many other factors.

Whether this is a boom for us gamers (Star Fox! X! F-Zero! New Miyahon IP! Earthbound!) or a bust ("What the fuck's a Zelda? We only make HappyBob in Fantasmaland games now. Are you thinking of AmazonLad and the Harpies of Malcontent?") remains to be seen, but again, my gut tells me that we could have focus shifted towards us in the future.

I think their next console may be designed a bit more with the West in mind while the 3DS successor remains Japan-focused. To compensate for the market split, both systems will have a similar architecture for easy porting of games between the two.

 

[SirUltimos]

The problem with straight up buying developers is that the talent often doesn't like that and will leave at the first opportunity, eliminating the reason the developer was purchased in the first place. It's why Nintendo tends to favour partnerships, I think.

 

[Scum]

Just a crazy idea of mine.

EAD Japan
Software Development Group No. 1 - Hideki Konno's Team
Software Development Group No. 2 - Hisashi Nogami's Team
Software Development Group No. 3 - Eiji Aonuma's Team
Software Development Group No. 4 - Hiroyuki Kimura's Team
Software Development Group No. 5 - Tadashi Sugiyama's Team
Software Development Group No. 6 - Takao Shimizu's Team
Software Development Group No. 7 - Yoshiaki Koizumi's Team
Software Development Group No. 8 - Shigeru Miyamoto's Team

EAD US & Canada
Software Development Group No. 9 - Monster Games Inc.
Software Development Group No. 10a - Retro Studios Team Alpha
Software Development Group No. 10b - Retro Studios Team Beta
Software Development Group No. 11 - NST
Software Development Group No. 12 - Next Level Games
Software Development Group No. 13 - Setup/Acquire a new team

EAD Europe
Software Development Group No. 14 - Shin'en Multimedia
Software Development Group No. 15 - Setup/Aquire a new team
Software Development Group No. 16 - Setup/Aquire a new team

Create new IPs
Resurrect/HD Remake "old" IPs

 

[coolasj19]

So Nintendo does one thing, and only one thing(minus their side businesses?). Gaming. Why isn't Nintendo the best at it? Why don't they have an insane amount (no, they obviously don't have enough) of in house studios? Why do they have such horrific 3rd relationships? Why content to be full of such small ambitions? Nintendo should be the people always at the forefront of new technologies and new IP and new innovations. But they aren't. And, I just don't get it. How can a company be so, slightly above average, at the one thing they do?

Spoiler

Slightly above average and almost none of these criticisms are leveled at their fantastic games. Just their businesses.

 

[TreasureHunterG]

After all the mistakes Iwata made, his best option is to leave his office, he's no longer suited to run the company after his fuck up with both 3DS and Wii U's releases and inability to turn around Wii U's situation. The company is in need to re-evaluate completely it's strategy alright, they have been way too much japanese centric, conservative, third-party unfriendly, short sighted and profit centric for their own good, they need a young, in-touch-with-reality new direction to run the company like they were in the 80s.

Mobile/smartphones alone are going to improve Nintendo's situation, they need to expand their audience for home consoles. Stop milking Mario and relying on a few dozen titles, invest into the huge catalog from many different genres Nintendo have, try new, ambitious IPs, too. Bring back NOA and NOE's autonomy, reassemble their production studios, amend relations with western third-parties.

 

[Snakeyes]

Just a crazy idea of mine.

EAD Japan
Software Development Group No. 1 - Hideki Konno's Team
Software Development Group No. 2 - Hisashi Nogami's Team
Software Development Group No. 3 - Eiji Aonuma's Team
Software Development Group No. 4 - Hiroyuki Kimura's Team
Software Development Group No. 5 - Tadashi Sugiyama's Team
Software Development Group No. 6 - Takao Shimizu's Team
Software Development Group No. 7 - Yoshiaki Koizumi's Team
Software Development Group No. 8 - Shigeru Miyamoto's Team

EAD US & Canada
Software Development Group No. 9 - Monster Games Inc.
Software Development Group No. 10a - Retro Studios Team Alpha
Software Development Group No. 10b - Retro Studios Team Beta
Software Development Group No. 11 - NST
Software Development Group No. 12 - Next Level Games
Software Development Group No. 13 - Setup/Acquire a new team

EAD Europe
Software Development Group No. 14 - Shin'en Multimedia
Software Development Group No. 15 - Setup/Aquire a new team
Software Development Group No. 16 - Setup/Aquire a new team

Create new IPs
Resurrect/HD Remake "old" IPs

+ Write a blank check to Matsuno and Hiroyuki Ito.

 

[RoombaDance]

My predictions: Wii U will miss projections, Nintendo is going to talk about how they plan to position the console in emerging markets like China (probably announce they have acquired the Chinese distribution subsidiary that markets the Q), will talk about how they plan to diversify the lineup, and generally discuss their view that home consoles are a declining market. 3DS will also miss projections but will be a money-maker.

My modeling suggests about a ~60-70% miss in operating profit for the FY, but the return to profitability will be enough to give Nintendo another 2 years leeway despite the big miss and let them play out the Wii U. In any case, none of the major Japanese institutions holding Nintendo stock are eagerly pushing for a strategy shift - they are more concerned about the preservation of long-term value and most are on-board with Nintendo not killing their pricing power by jumping into smartphones.

Woah, it looks like one person on GAF knows what he's talking about. When are we expecting the launch of systems in China?

 

[metalslimer]

After how good WW HD looks, I do hope they announce a bunch of new HD remakes to pad out the lineup. I'd rather they not be more Mario games though.

 

[AcademicSaucer]

They need more western studios. NOA needs autonomy to set up their own teams

 

[Aquamarine]

Nintendo has already been clear and consistent that they won't talk about any change or discuss a fundamental shift in home console strategy until the end of the fiscal year - Iwata's revision on corporate strategy was specific to their plans to enter emerging markets and how they plan to increase share and he has quite frequently had Q&A discussions after Nintendo has said they won't - dating back to when the Wii was doing well - based on their need to explain existing market conditions.

The OP is a collection of personal opinions with cherry-picked references.

Q3 is important and Nintendo has referenced that in the past - the numbers for the Wii U aren't going to look good and I think the 3DS is going to miss expectations as well, but they aren't going to do anything drastic as they have been explicit about seeing their release schedule into the middle of the year play out. There is also zero chance Nintendo is going to rush into smartphones following a poor Q3 since it will likely eat into their one reasonably profitable product rather than somehow make up ground in their home console business.

Moreover OP doesn't really understand Nintendo's priorities - while financially it is important to Nintendo to have a good presence in home consoles in the West - Nintendo always measures the success of their businesses based on their success in Japan first and foremost, because it's their cash-cow market where they have high margins and a competitive advantage to secure development talent.

That's the reason why the N64, despite being quite profitable in the US, was largely considered a failure because they failed to capture the broad audience and mainstream market in Japan.

My predictions: Wii U will miss projections, Nintendo is going to talk about how they plan to position the console in emerging markets like China (probably announce they have acquired the Chinese distribution subsidiary that markets the Q), will talk about how they plan to diversify the lineup, and generally discuss their view that home consoles are a declining market. 3DS will also miss projections but will be a money-maker.

My modeling suggests about a ~70% miss in operating profit, but the return to profitability will be enough to give Nintendo another 2 years leeway despite the big miss and let them play out the Wii U. In any case, none of the major Japanese institutions holding Nintendo stock are eagerly pushing for a strategy shift - they are more concerned about the preservation of long-term value and most are on-board with Nintendo not killing their pricing power by jumping into smartphones.

I also expect a stock buy-back of about 1 billion dollars, partially Yamauchi's shares to cover the inheritance tax, but also open it up more broadly in an effort to reduce the chance of a hostile take-over.

I don't like the dismissive tone that this reply has. I feel like you're implying this topic has no value, and I don't agree with that.

I was basing the OP on the information gleamed from the conference call and the investor notes released from analysts at Jefferies Group, et al. If you have an issue with it you can take it up with them. For example, they backed up my statement that Iwata will do something after Q3 releases. The date that meeting actually happens is up for debate.

Of course the examples are "cherry-picked." I wanted to show random examples of Nintendo's struggles. I don't feel like I'm in the wrong for choosing examples that fit my narrative because that wasn't the point of the article. The point was that there's a good chance Nintendo will do something in response to Q3, given its incredible importance to Nintendo's overall profitability. Iwata has already publicly stated in an Osaka press conference that Q3 results will cause Nintendo to "decide what the company needs to do, over the long-term, about its platform."

I therefore concluded that we will see change prior to the conclusion of the fiscal year. The changes might not be visible until after the middle of the year, or they may be compounded with a similarly awful FY results, but I believe there's a good chance wheels will be set into motion.

The model I was using for "Nintendo's priorities" was the percentage of revenues from the overseas markets, which has been consistently >70% for quite a while now. I recognize that Japan is a high-margin territory, but we can't understate the emphasis Nintendo / Iwata puts on the worldwide market. There's a reason why Nintendo has worked with IPs (Metroid, Zelda, Sonic: Lost World, etc.) that appeal primarily to the Western market. Hell, Iwata has made it his priority to try and get the Western 3DS market up to snuff with the successful domestic market.

Remember this quote?

"First of all, this may not be a direct answer to your question, but it is my job to focus on how to accomplish this aim, rather than to think about what we should do if our aim cannot be accomplished. I believe my job is to establish as promising a situation as possible to accomplish this aim. From this perspective, for Nintendo 3DS, it is vital to create similar momentum as we see in Japan in the overseas markets. So, the point is to launch several key titles seamlessly abroad to change the sales momentum of Nintendo 3DS itself, and then to create a cycle where hardware sales soar and its software sells well. As for Wii U, there will not be any key titles at the beginning of the year, so even though it will take some time, starting from this summer when the software lineup is enriched, we will promote our platform and aim to change the sales momentum dramatically." - Satoru Iwata

My specific point in that scenario was that small successes in the Japanese market get outweighed by horrid overseas performance, and that isn't an incorrect assessment.

 

[Scum]

After how good WW HD looks, I do hope they announce a bunch of new HD remakes to pad out the lineup. I'd rather they not be more Mario games though.

Waverace HD from Monster Games.

 

[ipukespiders]

I love my Wii U, but what can Nintendo do? They can't even manage to release SMB3 here in NA. Incompetent? Oblivious? Arrogant?

 

[Scum]

Aqua, do you see Senior Managers such as Miyamoto and Takeda as a bad idea? I don't know why, but I've always thought that Iwata will be far better off with Arakawa/Lincoln style hired goons instead. Then again, I don't know much about the management. :lol

 

[Guevara]

Flying back home the other day, the dude next to me played Pokemon the entire flight, and a women a row up played Super Mario World for a while. But the guy was playing on a laptop and the woman was playing on her phone. These people were not stereotypical pirates, they just had folders full of roms.

My point is people are playing Nintendo games on mobile, just without Nintendo. There's obvious demand. But a clumsy or insufficient mobile strategy will be useless. $8 or $10 a game with the virtual console release schedule of 3 games a week can't compete with free.

 

[balohna]

I like Nintendo's current direction, with the exception of how slow the VC trickle has been and the lack of proper account system for purchases.

I know they aren't doing well with Wii U, but I love that they're sticking to their guns. I honestly just hope it pans out for them, and if they do change their strategy I hope it's something that's still compatible with releasing quality software for their own hardware. Nintendo are one of the only major publishers I have very much respect for as a gamer. Nine times out of ten, if I buy a Nintendo release I'm buying a quality title that will not be outdone or replaced by an iterative sequel the following year. Valve (if they count) and Sony are up there as well, and of the major western publishers I definitely have some reverence for Take 2's huge amount of success that manages to include long development cycles, a notable lack of almost anything that might be considered anti-consumer and high quality releases. But I personally only like a handful of their games.

 

[Anth0ny]

Great OP, Aqua.

They're fucked, there's no other way to put it. Wii U is totally fucked. 20 million isn't happening by the time they roll out the next console. 3 million isn't even happening by the end of the fiscal year, let alone 9.

At this point, I think their best bet is to drop the gamepad, drop the price and hope to god that Kart and Smash can sell a ton of people on a $249 or even $199 HD Nintendo box.

I think Iwata's gone at the end of the fiscal year too. They probably aren't even going to hit the new expectations for Wii U, which will be DRASTICALLY lower than the 9 million units sold figure.

 

[Ecotic]

Aquamarine, Nintendo's share price has gone up more than 50% since hitting its multi-year lows in February of last year, and it has confounded me to no end. The company's dire situation has actually become more apparent since then.

But now it makes total sense. Investors are expecting a bad earnings report and banking on the company switching strategy.

IMO they're going to be totally disappointed. Nintendo hasn't been building anything these past few years. They haven't been making studio acquisitions in order to execute a future strategy, they have no forthcoming hardware, they haven't done anything. They're just a company gambling on a gimmick to sell hardware so they don't have to do the hard work of actually building new IPs, new studios, and strengthening third-party relations.

Ha, they're screwed. Short NTDOY right before earnings and you might can ride the price down from $16.50 to the 12ish range.

 

[BlackJace]

Aquamarine, Nintendo's share price has gone up more than 50% since hitting its multi-year lows in February of last year, and it has confounded me to no end. The company's dire situation has actually become more apparent since then.

But now it makes total sense. Investors are expecting a bad earnings report and banking on the company switching strategy.

IMO they're going to be totally disappointed. Nintendo hasn't been building anything these past few years. They haven't been making studio acquisitions in order to execute a future strategy, they have no forthcoming hardware, they haven't done anything. They're just a company gambling on a gimmick to sell hardware so they don't have to do the hard work of actually building new IPs, new studios, and strengthening third-party relations.

Ha, they're screwed. Short NTDOY right before earnings and you might can ride the price down from $16.50 to the 12ish range.

So

according to you they're just twiddling their thumbs right now? They literally aren't doing anything?

 

[GetemMa]

Nintendo moves at a snails pace and despite their recent failings I think the 3DS and that giant pile of DS/Wii money will make them feel comfortable to keep moving at a snails pace.

The biggest shakeup we could possibly see is a major epic price cut for the WiiU and possibly making the WiiU Gamepad optional, bundling it with a Pro Controller instead. Lets be honest my fellow Nintendo fans, the only great game that requires the gamepad is ZombiU. The rest simply do not unless you want off TV, which is a great feature but making it optional to get the price way way down is the best way to go imo.

$149
$199 w/ Kart 8

 

[Ecotic]

So

according to you they're just twiddling their thumbs right now? They literally aren't doing anything?

Nintendo is like a guy on a boat with one oar. He's paddling, a furious effort is being expended, but he's going in circles.

 

[RedSwirl]

Flying back home the other day, the dude next to me played Pokemon the entire flight, and a women a row up played Super Mario World for a while. But the guy was playing on a laptop and the woman was playing on her phone. These people were not stereotypical pirates, they just had folders full of roms.

My point is people are playing Nintendo games on mobile, just without Nintendo. There's obvious demand. But a clumsy or insufficient mobile strategy will be useless. $8 or $10 a game with the virtual console release schedule of 3 games a week can't compete with free.

The problem is that going on mobile essentially means Nintendo giving up on its own hardware, because right now Nintendo's software, old and new, is pretty much the only selling point of its hardware. Maybe if the GamePad had actually been a success and blown up, and people ended up buying Nintendo's hardware specifically for the hardware the argument might be a big different. It's kind of like why Apple and Microsoft allow some of their own software to run on competing operating systems -- their confident each OS can generally sell by itself. While console gaming works differently, Nintendo is in basically the opposite situation right now. Where was that recent thread showing the split between how much money Nintendo makes on hardware vs software?

 

[Mr. F]

That dumb box has everything wrong with it but I want to see it do moderately well real badly. This year should be interesting in any case, their stubbornness has definitely caught up with them and it'll be interesting to see how they finally shift.

Despite the immense pressure for it, I hope their new strategy is something more interesting than mobile.

 

[w1gglyjones]

Aquamarine, Nintendo's share price has gone up more than 50% since hitting its multi-year lows in February of last year, and it has confounded me to no end. The company's dire situation has actually become more apparent since then.

But now it makes total sense. Investors are expecting a bad earnings report and banking on the company switching strategy.

IMO they're going to be totally disappointed. Nintendo hasn't been building anything these past few years. They haven't been making studio acquisitions in order to execute a future strategy, they have no forthcoming hardware, they haven't done anything. They're just a company gambling on a gimmick to sell hardware so they don't have to do the hard work of actually building new IPs, new studios, and strengthening third-party relations.

Ha, they're screwed. Short NTDOY right before earnings and you might can ride the price down from $16.50 to the 12ish range.

Nintendo trades on low volume and pays a healthy dividend. I wouldn't pay to much attention to the share price since more relevant metrics are readily available directly from Nintendo (and other sources).

I don't like the dismissive tone that this reply has. I feel like you're implying this topic has no value, and I don't agree with that.

Nintendo has already been clear and consistent that they won't talk about any change or discuss a fundamental shift in home console strategy until the end of the fiscal year

Well, we can all play nice

on topic, that's the trick though, right? Nintendo seemingly having to find a new way(s) to revitalize its business of family friendly products that produce large margins, and adhere to the business practices and game development philosophies that are dear to the staff, management and company. The institutional investors likely realize how important some of these basic fundamentals are, but also struggle to grasp how best Nintendo can execute them and take aim in a different direction. The entire industry has become more conservative, the last thing you'd want to do is make a dramatic shift towards something that was volatile in a rash attempt to correct errors in management decision making.

I hate that Iwata has to answer to investors. I really fucking hate it.

 

[Ninjimbo]

I hate that Iwata has to answer to investors. I really fucking hate it.

 

[PotionBleue]

Where was that recent thread showing the split between how much money Nintendo makes on hardware vs software?

Maybe this?
An analysis of Nintendos financials

 

[Chittagong]

Solid OP, good fact digging and context setting.

Some thoughts:

- Nintendo does not too drastic strategy changes in the short term, never have. Wii was a huge strategy change (from 'do powerful gaming hardware with modern silicon' to 'do not compete on silicon any longer at all, only compete on interface'). This change was in the cooker for a long time and Nintendo leadership thoroughly prepared the market for it by a lot of narrative about 'expanding the audience', 'going for the blue ocean' etc. Meanwhile GameCube dragged along as a living dead. For this reason I do not believe an apparent dramatic strategy shift will be imminent - but one will be worked on behind closed doors and we will start to be prepared for it with some narrative about the direction soon.

- Nintendo's best bet for 2014-2015 is dumping the Wiipad into optional accessory and making Wii U an impulse buy Mario Kart box / Smash Bros box. With those titles, combined with the current catalog there begins to be a sufficient mass of exclusive first party content to carry Wii U gracefully through 2015 as a first party box, much like 3DS is. The few anomalies in games not working won't really matter, and Miiwerse and browser are non-issues. Wii U will essentially become a secondary console mostly picked up by people interested in a handful of Nintendo IP. This gives Nintendo some leeway to adjust their strategy, avoiding early killing of Wii U.

- With Wii U dragging through 2015, this gives Nintendo time until 2016 to release a new console. That puts Wii U into a 4 year cycle - as short as Nintendo can do without losing consumer trust in platform support Sega style. Consumers losing trust in Nintendo support for its hardware would be disastrous and the only scenario that would force them 3rd party / mobile - thus they will avoid any idea of 'killing Wii U'.

- The 2016 console will have to be announced in 2015, which could put Wii U in an uncomfortable position ahead of its last major Christmas. For this reason it's likely that much like DS which came about 'too early' in the GBA cycle, they will initially talk of the new console as a 'third pillar' not admitting their real Wii U phase out plan for 2016 - although for anyone understanding the (non)economics of their PowerPC silicon the need to axe Wii U sooner than later will be obvious. But Nintendo will 'pretend' to fully back Wii U and only introduce the ARM console initially as a way to 'expand their market'.

- Making the new console a 'third pillar' will allow Nintendo substantial conceptual and architectural freedom. They can finally go on ARM for their home console, dump hardware-based BC with the Power PC lineage and create the unified console/portable architecture they have spoken long about and for which they have co-located their teams. The ARM powered console would look like a microconsole to us when compared to Wii U, PS4 and Xbone, and thus credibly carry the 3rd pillar label.

- The ARM based home console will have an easy time in doing digital downloads and emulating old back catalog. This is probably the reason for Nintendo's apparent lack of progress with Virtual Console on Wii U - they have essentially done a Disney vaulted their assets to reintroduce them for their ARM based console as a key selling point.

tl;dr

1 - No imminent strategy change, but expect narrative preparing us for the new direction to be gradually introduced
2 - Wii U to drag through 2015 Christmas market
3 - New ARM based console for 2016, initially talked about as a 'third pillar', not Wii U replacement - but really will be their only console future

 

[LegendofLex]

I don't see how anyone could expect them to reveal any real change in strategy yet.

Even if there was a big problem with their software or hardware strategy, they couldn't very well just up and cancel everything they had in development. That would be fatal to their bottom line.

The mass delays suggest that they have been buying time to figure out what to do with the third wave of software (the wave that will follow the already-shown 2014 lineup).

The best thing I think we could see them really do in the short term is demonstrate greater aggression in pursuing software like Minecraft/Terraria/Rogue Legacy that complements their software lineup and their market's values.

So Nintendo does one thing, and only one thing(minus their side businesses?). Gaming. Why isn't Nintendo the best at it?

The utter domination of both DS and Wii indicate that Nintendo is perfectly capable of outperforming the rest of the industry at both software and hardware. The real question should be why they abandoned the high-performing software (Wii "revolution" games) for the software they declared to be causing gaming to go into decline (sequels to GameCube games).

Why don't they have an insane amount (no, they obviously don't have enough) of in house studios?

They are having a hard enough time managing their existing resources. If you cannot produce hit titles with a small number of studios, you are not going to do so with a larger number of studios. Quantity does not beget quality.

Why do they have such horrific 3rd relationships?

Third parties don't want consoles like DS and Wii to disrupt the "high performance/big budget" models they're comfortable with. They do not know how to compete in a DS/Wii type of environment. And because Nintendo has established that they are most relevant when they are finding ways to disrupt the industry common sense, they have little to no interest in having good relationships with Nintendo.

Why content to be full of such small ambitions?

Small ambitions? Like what? Graphics? Online multiplayer? Universal accounts? None of these things are "ambitious" anymore. What is ambitious is believing that games can be played in different ways than are realized within the "traditional" console trajectory. Wii was code-named "Revolution" for a reason.

The real question is why Nintendo listened to everyone telling them to abandon the unparalleled ambitions they had with Wii and decided to make their next console try to fit in better with the "traditional" console paradigm.

 

[Striek]

I hate that Iwata has to answer to investors. I really fucking hate it.

I agree~ its soooo stupid that the people who own the company want their employee to be accountable to them!

 

[Freezie KO]

The real question should be why they abandoned the high-performing software (Wii "revolution" games) for the software they declared to be causing gaming to go into decline (sequels to GameCube games).

This is a false narrative. The Wii crowd is exactly who they wanted to get. NSMBU is the sequel to NSMBWii, which sold thirty million on Wii and had no Gamecube equivalent. Nintendo Land and Game and Wario are mini-game collections. Then they expanded Wii Fit, remade Wii Sports, and released a sequel to Wii Party.

The narrative that they didn't go after the Wii crowd is bunk. The problem is (a) the GamePad is large and confusing and the console is too expensive for that audience; (b) the software they made isn't compelling enough to draw casual players back to buy another console; and (c) those casual players (who only have a casual interest in games by definition) are much more well-suited to playing games on a device they already own, already carry around with them, and where they can get games for $1.

 

[Otakumegane]

Quick question here, what does ARM architecture have over PowerPC or x86?

What does an ARM console even implicate?

 

[Not]

C'mon guys-- when's the last time Nintendo actually budged in the face of unavoidable disaster? I feel like they just keep plucking along until the next console, riding their tired core franchises all the way to the finish line. Wii U sales are abyssmal, but if the past is any indication they'll just go "please understand" and ignore everything.

 

[Chittagong]

Quick question here, what does ARM architecture have over PowerPC or x86?

What does an ARM console even implicate?

In a nutshell

- Same chips as in tablets and smartphones
- Small, cheap, low temp, power efficient
- Reasonably powerful
- Provided by more vendors than one = cost competition
- Constantly size reduced by vendors = cheaper chips over lifetime without extra investment by Nintendo in die shrinks
- Modular = can have different festure sets plugged in on same SoC (eg. photogaphy on mobile, HDMI / 7.1 on console)

They basically hit all boxes Nintendo has been shooting with already by making Wii so low powered.

 

[BlackJace]

C'mon guys-- when's the last time Nintendo actually budged in the face of unavoidable disaster? I feel like they just keep plucking along until the next console, riding their tired core franchises all the way to the finish line. Wii U sales are abyssmal, but if the past is any indication they'll just go "please understand" and ignore everything.

The Wii? The DS?

 

[metalslimer]

I hate that Iwata has to answer to investors. I really fucking hate it.

Don't worry, based on recent years he'll provide some lip service while not actually doing anything anyway.

 

[kirby_fox]

This generation will basically be a sit out and fix after they miss Q3 results by a significant margin. Expect an HD port of an old franchise to fill in the gaps. My bet is Eternal Darkness HD, sold for $30, and is called a limited edition. Hints at an actual sequel will be made too.

The Wii U will basically be a cheap port machine for 3rd parties to maintain a Nintendo relationship as they readjust. Iwata will step down to a board member position or maybe even go back to making games. They'll promote someone from within. NOA will receive a new CEO with Reggie staying mostly as a figurehead. I expect both Iwata and Reggie to slowly disappear from public appearances/directs.

Nintendo is likely to expand into the tablet/phone market with this change. I expect them to potentially launch a tablet with a gaming focus at a low price, and may even use their own streaming technology found in the Wii U. While a phone is less likely, they could see an expansion into it as a Nintendo marketplace for both phones and tablets. Creating brand new titles for those devices, rather than porting older games like many are calling for them to do. This market could compliment or supplant the DS line.

Home consoles will then focus on Western development- expect more Zelda, Metroid, and Star Fox. Expect a brand new IP in the FPS genre to become a new Nintendo AAA staple. We may even see an M-rated Zelda, Metroid or F-Zero game to try to please Western 18-30 male tastes. (While I hate the idea, I don't doubt they may attempt it).

They may continue as is until the next console launch in 2017 (earliest for either Wii U/3DS to be dropped). But I don't doubt they will shake things up. They have to at this point, even if I don't like with how I see them doing it.

 

[LOCK]

There are two potential game changers being developed by Nintendo, their F2P and NFC games, that need to be introduced before we can officially regulate the console to GameCube status. Not to mention the upcoming heavy hitters in their traditional games.

I hope a low Q3 speeds up software releases and further development with third parties. I think FY2014 will be very good to Nintendo.

 

[Drona]

bundles
price drops
dev courting

thats all they can do for now until another 4 or 5 years come around.

silly to expect any hardware change. maybe a new model with an actual HDD perhaps.

 

[Freezie KO]

There are two potential game changers being developed by Nintendo, their F2P and NFC games,

Wii U will be saved by:

Steel Diver
tchotchkes

 

[LOCK]

Wii U will be saved by:

Steel Diver
tchotchkes

Both have the potential to bring in lots of money if done right. Emphasis on potential.

 

[LegendofLex]

This is a false narrative. The Wii crowd is exactly who they wanted to get. NSMBU is the sequel to NSMBWii, which sold thirty million on Wii and had no Gamecube equivalent. Nintendo Land and Game and Wario are mini-game collections. Then they expanded Wii Fit, remade Wii Sports, and released a sequel to Wii Party.

The narrative that they didn't go after the Wii crowd is bunk.

When NSMB Wii came out, it was the first 2D Mario game on a home console in over 15 years. That was pretty exciting. It also was the first 2D Mario game to support 4-player simultaneous play. I think people who'd been waiting for a new one of those might have hoped it would lead to the series picking up where it left off with Super Mario World. (Despite technically being a sequel, Yoshi's Island is a very different kind of game than the Super Mario Bros. series.)

In the end, NSMB Wii wound up being kinda ho-hum. By that I don't mean that it was a bad game, but that it came with lot of the bad habits of Nintendo's other Wii sequels (pointless waggle/motion controls, recycled content, notoriously forgiving difficulty level, etc.). It was "good enough" as people really missed that type of Mario game, but given Nintendo customers' solid track record of moving on when they don't like where the software is going (see: decline in sales for 3D Mario vs. 2D Mario, market resistance to Aonuma Zelda in favor of games with more perceived freedom, the Other M trainwreck), Nintendo should have known they would have to do more than simply make another NSMB sequel to keep the 2D Mario comeback going.

And what was interesting about NSMBU, exactly? That it was HD? One of the major principles behind Wii was that HD doesn't really matter that much - that being "HD" doesn't make the average consumer want to buy a game more - especially when the cost of entry is higher. (Trying to sell a mass market game as "HD" would be overshooting the market.) That it supported Off-TV? Obviously wasn't worth the cost of entry for most people either (overshooting, again). That it had Boost Mode? Please.

No, NSMBU repeated basically all the bad habits of NSMB Wii -- pointless waggle, recycled content, and it was still too forgiving difficulty-wise (I would say NSMB2 and NSMBU relied way too much on Star Coins for "challenge"). But NSMBU also failed to be anything interesting.

You say "the narrative that they didn't go after the Wii crowd is bunk." I should clarify that I am not saying that they didn't "go after the Wii crowd." I am saying that most of the games that Nintendo meant to deliver to the Wii crowd have failed to do anything meaningful to bring them back. These games are more like boxes Nintendo is checking off, rather than real efforts to create software that people are interested in.

NSMB of course is the epitome of this. The original Super Mario Bros. games were always known to have very excellent, fresh content. It should not surprise anyone that now that the same content has been extended across multiple games that its value has been diluted. Why would anyone pay $300 for NSMBU? It hardly even seems that Nintendo is interested in it.

The way they're handling Wii Sports is similar. Instead of being a central showcase title for how Wii U adds to the fun of Wii Sports, it's instead being distributed in a vein that's more similar to Nintendo's current Virtual Console releases: in a slow drip, with the expectation that people will pay for it in $10 increments as each new piece is released to gather up the full Wii Sports library or drop the day pass price to viral market it to their friends. Plus, does it look to you like Nintendo is doing a good job communicating that "hey, this is the next generation of motion controls! Get excited!" like they did with Wii Sports, Wii Fit, Wii Sports Resort, or any of their other hit titles on Wii?

The "false narrative" is that the Wii values ever lost their effectiveness. What is actually true is that Nintendo no longer pursues Wii values.

 

[JoeM86]

Nintendo will not go mobile. It's never going to happen. It would kill the company, despite it being what several short-sighted investors may want.

Iwata leaving is a possibility, but I also believe it'll be detrimental to the company. This isn't America where if something goes awry, then you should fire the guy who did it. Iwata built a lot of good will off of the DS, Wii and subsequent turnaround of the 3DS. The Wii U is a different beast with a lot of issues (even though I feel it is actually the best console out right now).

People continually believe that removing Iwata would magically fix everything when it could, and is more likely to, make things worse. First, Iwata isn't responsible for every decision. Yes, he's the CEO, but anyone in business knows that the CEO isn't responsible for every damned decision, that it's a group thing with the board and that if you want radical change, you'd have to completely clear house. The likelihood is that any replacements would be akin to Sony and Microsoft's heads and them not be gamers, but just focus on making quick money. Sure, Sony has Cerny to help steer them hardware wise, but if they didn't, they'd almost certainly have gone the same route as Microsoft did.

Nintendo as a company is one that doesn't wish to screw the consumer. Iwata was put forward the idea of microtransactions in Animal Crossing and shot it down instantly due to it being a horrific idea, even if it would have made them money. They don't allow their games to have DLC that completes the story or is locked away on cartridge. They delay games until they are perfect, rather than rush them out and just "patch it later". Do we really want this clearly gaming company to go the way of all the others?

Is Nintendo in trouble? Not really. They're back in the black now, despite operating profits still being negative, but that's explainable a fair bit. Do they need to shake things up and invest? They have been in the last year. There has been a major reshuffle of the higher ups of Nintendo and their HUGE R&D building is just about finished. This building drained a lot of their finances.

Is Wii U in trouble? Yes, absolutely. However, the Wii U is not everything Nintendo. It does make a dent in its financials, but the other avenues of Nintendo DO help prop it up.

Now, let's assume Nintendo go third party. People assume everything will be fine. However, they will lose their hardware streams. They will have to restructure and downsize (after building the big building meaning it was a waste). Output would diminish in both quality and quantity (Yes, they actually do release a lot. Rather than say "lol it has no games, actually look it up). Employee morale would diminish which would have an impact on their work. As the games would be the sole financial avenue, the software output would be their only way of getting money. Gone would be the times of experimental games like The Wonderful 101, and smaller franchises like Steel Diver, Kid Icarus, StarFox and even Metroid (It doesn't sell...get over it). It would become an annualised company of Mario, Pokémon, the occasional Zelda and Pokémon. It would then kill the company.

Same if they went mobile, especially as Nintendo's games require split second accurate control which just isn't very feasible on smartphones due to how the touchscreens work and the different architectures preventing a standard. It'd diminish quality.

Why not allow me to cultivate online friendships in a console format as well?

This is not a one or the other argument...It is a why the fuck not both argument!

It is both. Hence why Pokémon X & Y is on the 3DS, which can be portable and online. Putting it on a home console would remove the portable aspect and thus it isn't "both", but is the lesser.

The idea that Pokémon doesn't need to be portable is one perpetuated by players in the west. There is a massive cultural divide between Pokémon players in the west and those in Japan.

In the west, people buy the games, occasionally play with their friends locally, but focus on online. If there's an event distribution, they may go, but they will more likely sit in the car park and download the Pokémon there.

In Japan, however, if there's an event, there are massive queues to get into it. People battle, trade, do Funfest Missions (Gen V), help eachother with O Powers and loads.

Just recently in Japan there was a Gengar & Scizor event in Toys 'R' Us and Pokémon Centers. It was more popular than they could have possibly imagined that they had to post an additional note on the official site about the time restrictions and removing other barriers for getting the Pokémon.

Pokémon is quite clearly a handheld franchise. You say why not both? It has both. Putting it on a home console would just kill a large part of the market without giving any actual benefits other than "Look, pretty graphics".

 

[GiantEnemyGoomba]

Both have the potential to bring in lots of money if done right. Emphasis on potential.

While they may be able to bring in lots of money because of this, the bigger problem in WiiU sales will not be solved and the console will eat into the profit from Steel Divers, just like the 3DS.

 

[LegendofLex]

If anyone should get the axe, it is Miyamoto, not Iwata.

As the general manager of EAD, Miyamoto was responsible for approving the phoned-in Mario games and the bloated hand-holdy Aonuma Zelda games. He also was a driving force behind Wii Music and Steel Diver (shudders).

Not only that, Miyamoto was the lead hardware manager for Nintendo 3DS (Nintendo already tried 3D with Virtual Boy), and one of the key driving forces behind the Wii U GamePad (Nintendo already tried second-screen interactions with GameCube/GBA).

He has more of a direct responsibility for Nintendo's current situation than Iwata does.

 

[Imperfected]

I think it's a good thing if they make adjustments now.

Yes, they could continue to operate exactly the same way for a few more years. The longer it takes for a change to happen, though, the more extreme it's likely to be when someone finally pulls the trigger.

At the moment their situation isn't so dire that they have to do truly drastic changes. As an example, when people talk about "Going Mobile", it's worth noting: right now Nintendo is in a position where they could start making mobile products without actually reducing their presence in other markets. If they wait another two or three years, they'd probably end up having to sacrifice significant console/handheld development for the sake of adding mobile development assets.

A change right now is more likely to be an expansion into a new market or line of products, whereas the longer they wait the more likely it becomes that "change" begins to mean "giving up on something they're currently doing".

 

[ExFalsoQuodlibet]

Easy and quick software update to the WiiU -> remove the mandatory and pointless gamepad -> sell WiiU w/o gamepad for 200$ -> sell infinite digits of WiiUs -> third parties will release exclusive games to a console that's more profitable (lowers graphics -> lowers assets -> lower cost)

Incidentally, improve online services and release GBA games in the Virtual Console; remove the Nintendo Club - NNID - Friend Code - Mii bullshit and propose a unified account like everyone else successfully does: people who actively play videogames, a.k.a. the only real target for any console business that wants to be sustainable year over year, are smarter than Nintendo.

Remove region lock, actually listen to gamers like Sony and Microsoft did.

In short, Nintendo has super easy choices in front of it, but they're stubborn, archaic, close minded and control freaks.

 

[Mihael Mello Keehl]

Wii U will be saved by:

Steel Diver
tchotchkes

What is that T word?